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Chung v. Scholl

United States District Court, D. Maryland

September 26, 2019

CHRISTOPHER CHUNG, et al., Plaintiffs,
v.
TOM L. SCHOLL, et al., Defendants.

          MEMORANDUM OPINION

          Paula Xinis United States District Judge

         Pending before the Court is Defendants Tom L. Scholl’s and Keystone Coal Co.’s (“Keystone”) motion to dismiss. ECF No. 27. The Court finds no hearing is necessary. See Loc. R. 105.6. For the following reasons, the Court DENIES the motion to dismiss.[1]

         I. Background

         This action arises from an ongoing business relationship between parties who engaged in a series of discrete commodities-related contracts which, according to Plaintiffs, generated $14, 600, 000 in debts from four separate transactions that occurred between 1995 and 2012. ECF No. 3 ¶¶ 44, 46-63, 71, 79, 86. The first deal concerns a 1995 exclusive agreement brokered with P.T. Adaro Indonesia (“Adaro”) to sell Indonesian steam coal to Korea Electric Power Corporation (“KEPCO”). Id. ¶ 8. Defendants hired Plaintiffs to negotiate and enter into the coal sales contract with Adaro on Defendants’ behalf. Id. ¶¶ 4, 9. Defendants agreed to pay Plaintiffs two-thirds of the profits from Adaro’s annual coal sales to KEPCO. Id. ¶ 10. Based on ensuing negotiations, Plaintiffs secured on Defendants’ behalf a Coal Sales Agreement between Adaro and KEPCO. From May 1995 to early 2003, Defendants paid Plaintiffs two-thirds of the profits from the annual sale of at least two million tons of steam coal from Adaro to KEPCO. Id. ¶ 50.

         However, in early 2003, both parties learned that Adaro was dealing directly with KEPCO in violation of the Coal Sales Agreement. ECF No. 3 ¶ 13. Defendants and Plaintiffs decided to approach Adaro to reach resolution regarding this circumvention and agreed that Plaintiffs would negotiate the Adaro matter in exchange for receiving a percentage of any settlement proceeds. Plaintiffs initiated the settlement discussions with Adaro, and at some point, Scholl took over negotiations to reach a specific settlement amount. Id. at ¶ 15. Scholl concluded the settlement discussions with Adaro and represented to Plaintiffs that the claim had been settled for $9 million. Id. ¶¶ 16, 22. In fact, unbeknownst to Plaintiffs, Scholl settled with Adaro for twelve million dollars. Id. ¶¶ 17, 56. Plaintiffs only learned in mid-2017 from a former Keystone employee about Scholl’s deception. Id. ¶ 22.

         The second deal occurred in 2010. Scholl sought Plaintiffs’ assistance in securing a sales agreement with JFE Steel Corporation. Id. ¶ 81. Plaintiffs, once again acting on Defendants’ behalf and pursuant to a written agreement, negotiated the sale of Japanese steel from JFE to POSCO (formerly known as Pohang Iron and Steel Company) in Phohang, South Korea. Id. As compensation for the deal, Defendants agreed to pay Plaintiffs approximately $7.00 per ton of JFE steel sold to POSCO. Id. Plaintiffs contend that they are owed $2.4 million on this deal. Id. ¶ 83, 84, 86.

         Third, in July 2012, Plaintiff Christopher Chung assisted Scholl in securing a $35, 000, 000 business loan from ING. Id. ¶ 66. In exchange for Christopher securing the loan, Scholl agreed to pay Christopher $3, 000, 000 as payment. Id. ¶¶ 67-68. Despite having secured the loan for Scholl, Chung never received the agreed-upon compensation. Id. ¶ 83, 84, 86.

         Fourth, the Parties agreed Plaintiffs would establish for Defendants’ benefit an office in Seoul, Korea in exchange for $1.2 million. Id. ¶ 76. Although Plaintiffs fulfilled their obligations under this agreement, they have not yet been compensated. Id. ¶¶ 77, 78.

         On July 15, 2013, during a meeting between the Chungs and Scholl, Scholl admitted he owed Plaintiffs payment from the four above-described transactions and expressed his intent to reimburse Plaintiffs. Id. ¶ 24. The parties also memorialized, via written agreement dated July 15, 2013 (“2013 Agreement), the sums that Defendants owed Plaintiffs. Id.; ECF No. 3, Ex. 2. Scholl personally executed the 2013 Agreement. ECF No. 3, Ex. 2. Defendants, however, never repaid the monies owed.

         Instead, between April 1, 2017 and August 20, 2018, Scholl conveyed to Plaintiffs on several occasions his plan to pay the debts outlined in the 2013 Agreement. ECF No. 3 ¶¶ 24– 31. But once again, Scholl reneged on his promises, prompting Plaintiffs to file suit on March 27, 2019 in Montgomery County Circuit Court. ECF No. 3 at 1. The Defendants noted timely removal and now move to dismiss all claims as barred by limitations. ECF No. 27.

         II. Standard of Review

         A motion to dismiss brought pursuant to Rule 12(b)(6) tests the sufficiency of the complaint. Presley v. City of Charlottesville, 464 F.3d 480, 483 (4th Cir. 2006). The Court accepts “the well-pled allegations of the complaint as true, ” and construes all facts and reasonable inferences most favorably to the plaintiff. See Ibarra v. United States, 120 F.3d 472, 474 (4th Cir. 1997). To survive a motion to dismiss, a complaint’s factual allegations “must be enough to raise a right to relief above the speculative level on the assumption that all the allegations in the complaint are true (even if doubtful in fact).” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (citations omitted). “‘[N]aked assertions’ of wrongdoing necessitate some ‘factual enhancement’ within the complaint to cross ‘the line between possibility and plausibility of entitlement to relief.’” Francis v. Giacomelli, 588 F.3d 186, 193 (4th Cir. 2009) (quoting Twombly, 550 U.S. at 557). “[C]onclusory statements or ‘a formulaic recitation of the elements of a cause of action will not [suffice].’” EEOC v. Performance Food Grp., Inc., 16 F.Supp. 3d 584, 588 (D. Md. 2014) (quoting Twombly, 550 U.S. at 555).

         Although limitations usually constitutes an affirmative defense, where the bar to suit “is apparent on the face of the complaint, ” the complaint does not sufficiently “state a claim upon which relief can be granted.” G & H Clearing & Landscaping v. Whitworth, 66 Md.App. 348, 354 (1986). In that circumstance, the Court may dismiss the claim on limitations grounds. See Brooks v. City of Winston–Salem, N.C. , 85 F.3d 178, 181 (4th Cir. 1996) (“[D]ismissal nevertheless is appropriate when the face of the complaint clearly reveals the existence of a meritorious affirmative defense.”) (citation omitted); 5B Charles A. Wright & Arthur R. Miller, Fed. Prac. & Proc. § 1357 (3d ed. 2004) (“A complaint showing that the governing statute of limitations has run on the claim is the most common situation in which the affirmative defense appears on the face of the pleading, ” rendering dismissal appropriate).

         III. ...


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